G-20 leaders raise economic fears over Ukraine

IanTalley

WASHINGTON--Finance leaders from the world's 20 largest economies Friday expressed worries that Ukraine's crisis may fuel global economic instability, raising concerns about potential fallout from a major escalation in the sanctions battle between Russia and the West.

"We are monitoring the economic situation in Ukraine, mindful of any risks to economic and financial stability," the G-20 said in its official communiqué after two days of talks.

The statement required the consensus of all members of the G-20, which includes Russia as well as the U.S., indicating some agreement about the economic consequences of a large-scale sanctions battle.

The Obama administration has warned Moscow of its willingness to impose additional significant punitive measures if Russia doesn't curb its actions in Ukraine. On Friday, it added a natural-gas company in Crimea and seven Ukrainian officials connected with the annexation of Crimea to its sanctions list. That brought the total number of Russian and Ukrainian officials hit with U.S. sanctions to 38.

Western officials accuse Russian President Vladimir Putin of orchestrating new pro-Russia protests in eastern regions of Ukraine, just weeks after annexing Crimea. Meanwhile, Mr. Putin has threatened to shut off a critical source of energy supplies for Europe.

On Thursday, finance ministers from the Group of Seven leading industrialized nations weighed further punitive measures against Russia. But a brief G-7 statement after the meeting made no mention of sanctions, reflecting internal differences about the timing of an escalation in financial pressure.

"You're looking at something that may not be quite ready for people to decide," U.S. Treasury Secretary Jacob Lew told reporters Friday. "There isn't a finance minister in the world that wants to do something that has the risk of causing economic problems in Europe or in the global economy."

Still, Mr. Lew said that after a long discussion among G-7 members, there is "broad and strong unity within the G-7 on increasing sanctions" if necessary.

A number of European countries are wary of applying punitive measures against Russia that could hurt their own economies. Italian Finance Minister Pier Carlo Padoan, for example, said in an interview Thursday that an escalation "is in nobody's interest." Italy is a G-7 member, along with the U.S., Canada, Japan, Germany, France and the U.K.

"I don't think there is any acceleration of sanctions foreseen," Mr. Padoan said.

European foreign ministers are scheduled to meet Monday to discuss the issue.

The G-20 also backed an International Monetary Fund bailout designed to avert a collapse of Ukraine's economy. Despite expressions of international support for a Ukraine bailout, the IMF is still looking for lenders to help finance the international package, highlighting the political and economic challenges facing the country.

The IMF says it plans to contribute between $14 billion to $18 billion to the total $27 billion package, depending on how much others commit.

"There is still work to do in terms of finalizing some of the actions and ensuring the program is financed," Reza Moghadam, director of the IMF's European Department, said. The IMF's board is expected to approve a bailout by early May.

The U.S., Europe and Japan have pledged help. But Russian Finance Minister Anton Siluanov said he told his U.S. and German counterparts in meetings that Moscow isn't looking to provide any more financial assistance to Ukraine unless it meets several conditions, including recognizing Crimea's new status as part of Russia.

Mr. Lew pushed finance officials to support Ukraine. "It is critical that the international community...take immediate steps to also support the IMF program by providing financing support," he said.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.